This stock has increased its dividend for 51 consecutive years

Campbell, Lee & Ross Investment Management portfolio manager Darren Sissons said Automatic Data Processing (Automatic Data Processing Stock Quote, Chart, News, Analysts, Financials NASDAQ:ADP) looks attractive at current levels, despite recent share price weakness.

Speaking on BNN Bloomberg’s Market Call on Feb. 25, Sissons said the payroll processor has significant structural and regulatory barriers to entry that are often underappreciated.

“Quite easy to build a payroll processing platform,” he said. “You have to get connectivity to banks, regulators, through to the IRS, CRA, and then you also have to process, for example, spousal, parental garnishments, or if you have garnishments for debts and things like that.”

Sissons noted the stock sold off following broader concerns in the space but said valuation and dividend metrics now appear compelling.

“Typically when it’s at these levels from a dividend yield point of view, it goes on sale,” he said, adding that ADP has increased its dividend for 51 consecutive years.

ADP processes payroll for roughly one in six U.S. employees and serves more than 140 countries globally, he noted.

Shares have fallen 32.7% over the past 12 months but are up 20.7% over five years. Of analysts covering the stock, five rate it “Buy,” one “Hold” and one “Sell,” with a consensus price target of US$278.69.

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